On Wednesday afternoon, as President Donald Trump left the Oval Office, the sun was shining and the stock market was surging.
After preparing for a worldwide economic collapse, investors were celebrating his withdrawal from his intentions to raise tariffs on numerous U.S. trading partners less than two hours ago.
Wyoming Republican Senator John Barrasso told the president, “The markets are witnessing your genius.”
Donald Trump concurred. “No one has ever heard of it,” he said.
In this instance, it was a common bit of exaggeration that was accurate. Even by Trump’s second-term standards, the world was still reeling from the drama that unfolded over the past week.
By imposing new tariffs, the president alone had driven the world economy to the verge of collapse.
Businesses destroyed their plans, the stock market crashed, and international leaders braced for a future in which the richest country in the world would no longer be at the forefront of global trade.
Then Trump changed his mind. He reversed the majority of the tariffs in a surprise social media post seven days after announcing in a lavish Rose Garden ceremony what would have been America’s biggest tax increase since World War II.
After days of adamantly refusing to bend, he subsequently stated, “I think the word would be flexible.” “You have to be flexible,” he remarked.
Although administration officials stated that negotiations are ongoing, no new trade agreements have been reached, and it was unclear what the president had accomplished beyond the satisfaction of, in his words, having other nations “kiss my ass” to try to talk him out of the tariffs.
Nevertheless, real harm has been done, as the back-and-forth over tariffs shook confidence in U.S. leadership, exposed cracks within Trump’s team, and rattled companies that rely on international sources for products and international customers for sales.
Americans who use the stock market to save for retirement and college endured days of anxiety.
And the chaos isn’t finished yet. Originally announced on Saturday, Trump’s 10% blanket tariffs are currently in effect for dozens of countries.
Additionally, he raised import duties from China to 125%, causing the world to prepare for a confrontation between the two biggest economies.
America’s biggest trading partners, Canada and Mexico, are subject to 25% tariffs and 25% taxes on imported steel, aluminum, and automobiles.
For 90 days, other duties, such as those of 24% on Japan, 25% on South Korea, and 20% on the EU, are suspended to facilitate trade negotiations.
William Reinsch, a former U.S. trade official who is currently at the Center for Strategic and International Studies, stated,
“This just accentuates the policy uncertainty and sense of unreliability Trump is creating.”
“How does anybody know that he won’t change his mind on Friday or next week?” Reinsch asked, acknowledging that it’s fortunate that Trump decided against enacting some of his toughest tariffs.
Trump announces his decision on “Liberation Day.”
When Trump declared his tariffs on Wednesday, April 2, American flags were flown along the White House colonnade, creating a red, white, and blue background.
“This is Liberation Day, my fellow Americans,” he declared.
With a poster in hand, the president listed the duties he would impose on each nation: 32% on Thailand, 49% on Cambodia, 26% on India, and so forth.
To interpret the figures that would reset important economic ties, people squinted all across the world.
Long before he entered politics, Trump had a decades-long obsession with global trade.
His main issue is trade imbalances, which occur when the United States imports more goods than it exports.
However, conventional economists are perplexed by the focus and do not share the same level of anxiety.
They said it’s not surprising that a wealthy country like the United States would purchase more goods than it sells, and they don’t think tariffs alone will close trade deficits.
Trump, however, claimed that a “national emergency” existed, enabling him to impose tariffs without the consent of Congress.
Many analysts and investors immediately criticized the idea because his tariffs were determined by the magnitude of each trade imbalance rather than the import taxes levied by other nations.
The levies imposed on the penguin-dominated Heard and McDonald Islands were also perplexing.
Trump took a weekend trip to Florida the day after the announcement.
As he left the White House, he declared,
“The markets, the stock, the country, are going to boom,” his voice occasionally drowned out by the churning rotors of Marine One.
“And the rest of the world is interested in seeing if they can reach an agreement.”
The market, meanwhile, was collapsing, recording its largest one-day loss since the coronavirus pandemic five years prior.
And things didn’t get any better when Trump participated in a candlelit dinner for an allied political organization and went to a Saudi-sponsored tournament at his Miami golf property.
Trump announced his club championship victory to media on the Sunday night trip back to Washington.
“Winning is good,” he remarked. “You heard I won, don’t you?”
However, the damage was spreading both domestically and internationally.
Seattle’s Fulcrum Coffee Roasters prepared for growing prices for espresso makers from Italy and beans from Southeast Asia.
As a reminder of how interwoven car supply chains have become, Stellantis, the manufacturer of Jeep and Ram, stated it would halt production at plants in Mexico and Canada, resulting in temporary layoffs at other operations in Indiana and Michigan.
About a fifth of its workers, or 1,600 people, will be let go, according to the Dutch division of Tata Steel.
Michael Martin, the prime minister of Ireland, stated that “there is no way to sugar coat” the situation when trade with the United States began to slow down.
With its most significant export market imposing new tariffs on its apparel industry, Sri Lanka was concerned that its economic recovery would be halted.
Trump’s own party is becoming more and more hostile.
When unconfirmed news surfaced on Monday that the president was contemplating a 90-day halt to the tariffs, the markets were still in frenzy.
After a brief surge in stocks, investors discovered the information was inaccurate.
Trump declared, “We’re not looking at that,” as the rumored reprieve’s prospects faded.
By Tuesday, Trump’s closest advisors were publicly arguing with one another as concerns about a recession grew.
Elon Musk, a billionaire businessman who spearheads the administration’s attempts to reduce the size of government, publicly questioned the tariffs’ rationality, arguing that they would increase expenses for his electric car company, Tesla.
Musk “doesn’t understand” the situation, according to White House trade adviser Peter Navarro.
Musk retorted that Navarro was “dumber than a sack of bricks” and “truly a moron.”
Questions concerning the tariffs and their plans for retaliation were thrown at Republican senators as they returned to the Capitol for the workweek.
Laptops 1000Before the White House retaliated firmly with a threat of veto, some started to express support for legislation intended to limit a president’s tariff powers.
When asked if he understood Trump’s strategy on Tuesday, Wisconsin Senator Ron Johnson said, “Does anybody?”
Higher costs were anticipated by some of his state’s leading businesses, such as Kohl’s, while its dairy farms anticipated difficulties selling milk and cheese.
The European Union intended to impose reciprocal duties on Harley-Davidson.
During a hearing with Jamieson Greer, Trump’s senior trade representative, that day, Sen. Thom Tillis of North Carolina was even more direct.
He stated, “I’m just trying to figure out whose throat I need to choke” if the tariff plans fail.
Farmers in his area, who produce tobacco and raise pigs, among other items, were afraid of being caught in the crossfire of a trade war, and local tech companies and manufacturers could have to pay more for the goods they ship to overseas customers.
During his round of meetings on Capitol Hill, Treasury Secretary Scott Bessent, a former hedge fund manager with deep expertise in the banking industry, had lunch with Louisiana Republican Sen. John Kennedy.
Kennedy claimed that they “talked very frankly” about the tariffs, which had begun to worry him.
On Tuesday night, he was among several senators who sat down for an interview with Sean Hannity in an attempt to influence Trump through one of his preferred Fox News presenters.
Trump had been dismissing worries about the market meltdown and the tariffs by claiming that “sometimes you have to take medicine to fix something.”
Despite sharing the president’s concerns about unfair trade practices, Kennedy remained unconvinced.
“We are unsure if the medication will worsen the illness,” he stated.
Trump backs off, but his advisors say it was always part of the plan.
At 12:01 a.m. on Wednesday, the tariffs on allies such as South Korea, Japan, and the European Union went into effect, and by the time dawn in Washington, there were no indications that Trump would change his mind.
“Stay cool! He wrote on Truth Social that “everything is going to work out well.”
Trump also wrote: “THIS IS A GREAT TIME TO BUY!!!” – Counsel that turned out to be fortuitous.
The president later stated he’d been talking with his advisors that morning about delaying the tariffs, a statement that would send the stock market flying.
Trump’s declaration came while Greer was back on Capitol Hill for another hearing.
Nevada Democrat Rep. Steven Horsford questioned whether Trump’s trade aide was aware that the tariffs he had just defended for at least two hours had been put on hold.
Greer stated, “I am aware that the decision was made just a short while ago.”
“This is amateur hour, and it needs to stop,” Horsford exploded.
Karoline Leavitt, the press secretary of the White House, chastised reporters for failing to comprehend the president’s intentions.
She made reference to Trump’s 1987 book, The Art of the Deal, saying, “It’s obvious that many of you in the media missed it.” “You didn’t see President Trump’s purpose in this situation.”
However, even as it reversed the levies, the administration issued conflicting messages.
Bessent said that the markets had no bearing on the decision.
He told reporters outside the West Wing, “The president’s strategy was the driving force behind this.” “I had a lengthy conversation with him on Sunday, and this was his plan from the beginning.”
Later, Trump disputed Bessent.
He claimed to have been observing the bond market. “That is a very complex bond market.”
Trump did not indicate that he regretted the retreat. In the Oval Office, he was talking to drivers of championship race cars and saw dollar signs.
The president waved to two business executives in a video shared by one of his assistants.
“He earned $900 million and $2.5 billion today,” he stated. “It’s not bad.”
